Last week, a bill to establish a unified healthcare financing system in the state of California passed the Senate by a vote of 30-9. Senate Bill 770 seeks to achieve a unified, statewide healthcare system that would offer a wide package of medical services, including behavioral health, pharmaceutical, dental, and vision benefits, and wouldn’t require cost-sharing for essential services or treatments.
“Our fragmented healthcare system leaves lethal gaps in coverage that disproportionately impact historically and systemically marginalized communities,” said Sen. Scott Wiener (D- San Francisco), the bill sponsor. “SB 770 establishes a transparent process that will support stakeholders in doing the detailed work of building a better system while the Newsom administration collaborates with federal officials to ensure that it will be funded with California’s full share of federal healthcare dollars.”
California Agents & Health Insurance Professionals (CAHIP), which works to improve the health, financial, and retirement security needs of Californians, opposes SB 770. CAHIP, in collaboration with America’s Physician Groups, the California Association of Health Plans, CalChamber, and the Association of California Life and Health Insurance Companies, wrote a letter of opposition to members of the Senate Health Committee. A central concern is the cost of implementing such a system.
“Our organizations oppose SB 770 as amended April 12th, creating a workgroup to petition the federal government to redirect hundreds of billions of dollars in Medicare and Medi-Cal funding to a costly new, untested state-run healthcare system, thereby eliminating the Medicare and Medi-Cal programs that serve millions of Californians,” stated the letter.
SB 770 mentions how the state could save over $500 billion over the next ten years if a unified healthcare financing system is implemented. Without shifting towards a unified financing, it is estimated that healthcare spending in the state will increase by $158 billion over the next nine years, or a 30% increase over baseline spending. Further concerns from the opposing organizations include prohibiting private health coverage, and forcing all Californians into a new healthcare system with no ways to opt-out.
Bill supporters say SB 770 aligns with the state’s Healthy California For All Commission, which advocates for a unified healthcare delivery and financing system.
Under the 2019 Budget Act, the commission was put in charge of developing a plan that includes options for advancing the state’s healthcare delivery system. A commission report from April 2022 found that transitioning to a unified healthcare financing system would prevent 4,000 deaths per year, while saving Californians $158 billion annually in healthcare spending by 2031.
“Single payer is projected to cost over $500 billion a year, requiring large tax increases on individuals, employers, and small businesses,” stated the letter. “California has made incredible strides improving access to affordable coverage. The vast majority of Californians are satisfied with their healthcare and want private coverage options.”
If signed into law, SB 770 would eliminate the existing discrepancies between Medicare, Medi-Cal, employer-sponsored insurance, and individual market coverage. Services would be guaranteed, and would not vary based on age, employment status, disability status, income, or immigration status. Investments in public health would increase, as would efforts to address social determinants of health through an improved coordination of healthcare and human services.
The bill would require the formation of a Waiver Development Workgroup made up of appointed members and stakeholders such as consumers, patients, healthcare professionals, and labor unions. The California Health and Human Services Agency (CalHHS) does not have exact costs for the establishment of this workgroup, but expects it to be in the low millions of dollars from the general fund for 2023-24.
The California Health and Human Services Agency (CalHHS) would be required to hold discussions with the federal government about waivers, which would be reported to the Assembly and Senate health committees. The CalHHS secretary would provide a full set of recommendations for a formal waiver application by June 1st, 2024. The waiver would draw on federal dollars that are currently being spent on healthcare in the state.
SB 770 has gained momentum with numerous organizations supporting the bill, including the National Union of Healthcare Workers (NUHW), Health Access California, California Academy of Family Physicians, and the California Federation of Teachers. Michael Lighty, NUHW’s representative of a statewide coalition of organizations that sponsored the bill, Healthy California Now, spoke with State of Reform about the importance of the bill.
“The Healthy California Now Coalition includes organizations that have been advocating to guarantee healthcare for all Californians for decades,” Lighty said. “The advancement of SB 770, which seeks to codify the recommendations of Governor Newsom’s Healthy California for All Commission with actional steps on a concrete timeline, is an important step to ensuring all Californians have access to equitable, affordable, and quality healthcare when they need it.”
Lighty told State of Reform that the coalition is committed to this work, and ensuring that the communities most impacted by the inequities of the current healthcare system have representation in the process.
This year, the California Assembly also saw a renewed introduction of a unified healthcare financing system bill, known as Assembly Bill 1690. Bill sponsor Asm. Ash Kalra (D – San Jose) sees it as an opportunity to grow the movement for single-payer healthcare in the state. The bill is not expected to be voted on this year.